GBR HOSPITALITY QUARTERLY NEWSLETTER

Greek Hospitality Industry Performance

2010 Q4

Hotels • Resorts • Spas • Marinas • Casinos • Conference Centers • Theme Parks • Golf Page 2 of 4

Introduction

This newsletter provides a snapshot of the performance of Greek hotels based on a sample of more than 180 hotels & resorts in Greece. The hotel permorfmance data is complemented by data from other sources so as to place the Greek hospitality industry in the context of Greek tourism and of the International Hospitality Industry. Finally, the outlook of the industry, as seen by hoteliers themselves, is given.

International arrivals1 in Greek airports, 2010 compared to 2009

Region % Change in International arrivals -- Q4 % Change in International Arrivals – ytd Q4

0.5%

0.1%

-0.9% 2.1%

-3.5%

-4.6%

Source: SETE, processed by GBR Consulting

RevPAR2 in Greek hotels, 2010 compared to 2009

Region % Change in RevPAR of Greek hotels -- Q4 % Change in RevPAR of Greek hotels – ytd Q4

3.6%

-23.2%

-13.3% -7.4%

-20.0%

0.2%

Source: GBR Consulting

RevPAR in Competitive Destinations, 2010 compared to 2009

Region % ∆ in RevPAR of Comp. Dest.inations -- Q4 % ∆ in RevPAR of Comp. Destinations – ytd Q4

12.2%

2.8%

10.4%

9.7%

7.6%

8.3%

7.9%

6.6%

Source: STR Global, processed by GBR Consulting

1 The international arrivals statistics are based on SETE calculations compiling the data from 13 major airports of Greece, representing 95% of foreigners’ arrivals by plane in Greece and 72% of total foreigners’ arrivals. Thessaloniki airport does not distinguish between arrivals of Greeks and foreigners.

2 RevPAR : Revenue per Available Room; for Greek resorts, calculations are based on TRevPAR (i.e. Total RevPAR).

Athens

Thessaloniki

Rest of Greece

Athens

Thessaloniki

Resorts

S. Europe

Rome

Madrid

Cairo

Hotels • Resorts • Spas • Marinas • Casinos • Conference Centers • Theme Parks • Golf Page 3 of 4

Commentary

� International arrivals by air showed an increase (+0.5%) for Athens this quarter, for the first time in 2010. This can be attributed to the 2500 years anniversary Marathon Run last October, which attracted a large number of foreign runners, and has helped to contain the overall drop to 4.6%. However the RevPAR developments continued to be negative, with Q4 showing the largest quarterly drop (-13.3%) of 2010, leading to an overall drop of 7.4% for the year. As a result of this performance, five downtown hotels in Athens have seized operations in the last 6 months.

� Thessaloniki showed a similar, if more marked, picture with a marginal increase (0.1%) in arrivals in Q4 and a sharp drop in the RevPAR of the quarter (-23.2%), leading to an annual RevPAR drop of 20%.

� This disappointing performance for city hotels is even more striking in comparison to competitive destinations and Southern Europe, which showed considerable improvements in their RevPAR in 2010.

� Resorts, however, performed better by holding their position on an annual basis (an annual increase in RevPAR of +0,2% and in arrivals of +2.1%); the feared collapse, in the wake of the adverse debt developments and associated publicity for the country, of the traditional Greek tourism product eventually did not materialise.

Hotel & Other News

� VAT on hotel services was reduced to 6.5% (effective Jan. 1st,, 2011) from 11%, in an effort to increase the competitiveness of the sector. According to our survey ‘Tourism Barometer’, www.gbrconsulting.gr/barometer,conducted among Greek hoteliers, 77% of hoteliers will use this reduction, either in its entirety (28%) or partially (49%), to boost competitiveness, while 10% remain indecisive and 13% will use it to increase their profitability.

Things to consider for the next Quarter

� The government has announced the start of the “Athens every week” marketing campaign in the aftermath of the successful staging of the Athens Marathon Run commemorating 2500 years from the original Marathon run. The 2500 Marathon Run attracted approximately 20,000 runners making a substantial impact to the occupancy of Athens hotels. The “Athens every week” campaign will create unique events for every week in Athens to increase its attractiveness as a destination. Furthermore, the two main parties have declared their intention to collaborate so as to preserve the centre of the town functional and avoid the social unrest of 2009 and 2010.

Outlook

� In our Tourism Barometer survey (see above), hoteliers expect further deterioration in terms of Occupancy and ARR (see graph below). Pessimism is greater among city hoteliers than resort hoteliers.

«MY HOTEL»

12%

17%8%

20%

44%41%

21%

19%

14%

5%

7%

18%

19%

19%

37%

«MARKET IN GENERAL»

39%

23%

23%

11%5%

ΟCC ARR

ΟCC ARR

Decrease 2 – 5%

Stability -2% - +2%

Increase >5%

Decrease >5%

Increase 2 – 5%

% of respondents that expected

Hotels • Resorts • Spas • Marinas • Casinos • Conference Centers • Theme Parks • Golf Page 4 of 4

� The two segments that differ and show optimism in terms of Occupancy and ARR expectations, are the hoteliers of Crete and the hoteliers of 5* properties.

Hotels in Crete 5* Hotels

«ΑΓΟΡΑ ΓΕΝΙΚΑ»

27%

27%

3%6%

38%

ΟCC

49%

9%6%

27%

9%

ARR

21%

32%

9%6%

32%

ΟCC

46%

9%

12%24%

9%

ARR

Decrease 2 – 5%

Stability -2% - +2%

Increase >5%

Decrease >5%

Increase 2 – 5%

% of respondents that expected

«MY HOTEL»

«MARKET IN GENERAL»

«ΑΓΟΡΑ ΓΕΝΙΚΑ»

15%

27%

4%6%

48%

ΟCC

43%

8%

20% 24%

6%

ARR

6%

27%17%

6%

44%

ΟCC

41%

12%

28%

18%

2%

ARR

Decrease 2 – 5%

Stability -2% - +2%

Increase >5%

Decrease >5%

Increase 2 – 5%

% of respondents that expected

«MY HOTEL»

«MARKET IN GENERAL»

GBR Consulting is the leading hospitality and tourism consultancy in Greece. Its experience includes market and financial feasibility studies as well as valuations and development plans for Hotels, Resorts, Spas, Marinas, Casinos & Gaming, Conference Centers & Arenas, Theme Parks, Golf Courses etc.

GBR Consulting is affiliated to CBRE Atria, the Greek arm of CB Richard Ellis, providing together a specialized service for Tourism Properties Transactions.

GBR Consulting possesses a database with financial data for over 1,000 hotel establishments in Greece and has a datashare agreement with STR Global, the word’s largest databank of hotel operational data.

Contact Details GBR Consulting Voukourestiou 23, 106 71 Athens, Greece T (+30) 210 36 05 002 F (+30) 210 36 06 935 www.gbrconsulting.grinfo@gbrconsulting.gr

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